Técnicas e instrumentos de recolección de datos

Corporate governance is defined as “the system of checks and balances, both internal and external to companies, which ensures that companies discharge their accountability to all their stakeholders and act in a socially responsible way in all areas of their business activity” (Solomon, 2007:15). The central role of corporate governance is to provide accountability within the organisation (Pearson, 2014).

Pearson (2014) suggests that accountability is achieved by the identification of risks by the organisation, having appropriate policies in place to mitigate risk and mechanisms to enforce internally for monitoring that these mechanisms are effective within the organisation, and lastly, by validating the internal and external actions.

According to Klievink et al. (2016), governance establishes an agreement on the procedures and standards which will guide the activities of the organisation.

Frameworks and guidelines assist in creating necessary responsibilities and roles to ensure that the organisation builds and maintains a privacy-aware and ready organisation (Dennedy et al., 2014).

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The King III and King IV Reports define corporate governance as “the exercise of ethical and effective leadership by the governing body towards the achievement of the following governance outcomes: ethical culture; good performance; effective control;

legitimacy” (King III Report, 2009; King IV Report, 2016). A comparison of the King III and King IV governance components are highlighted in Table 3-1 below. The 17 principles are also portrayed in the table which are linked to the governance components of the King IV Report.

Table 3-1: King III Report: Governance components King III Governance

Organisational ethics 2. “Govern the ethics of the organisation in a way that supports the establishment of an ethical culture.”

Responsible corporate citizenship

3. “Ensure that the organisation is and is seen to be a responsible corporate citizen.” opportunities, strategy, business model, performance and sustainable development are all inseparable components of the value creation process.”

Reporting

5. “The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and its short, medium and long-term point and custodian of the corporate governance in the organisation.”

Composition of the governing body

7. “The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.”

Committees of the governing body

8. “The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its

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support continued improvement in its performance and effectiveness.”

Appointment and delegation to management

10. “The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and effective exercise of authority and responsibilities.”

4. The governance of

risk Risk governance

11. “The governing body should govern risk in a way that supports the organisation in setting and

12. “The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives.”

6. Compliance with laws, rules, codes

and standards

Compliance

13. “The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that it supports the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in short, medium and long term.”

7. Internal audit Assurance

15. “The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision making and of the organisation’s external reports.”

8. Governing responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time.”

9. Integrated reporting and disclosure

Refer to Reporting Refer to Principle 5

Responsibilities of institutional investors

17. “The governing body of an institutional investor organisation should ensure that responsible investment is practiced by the organisation to promote the good governance and the creation of value by the companies in which it invests.”

Source: King III and King IV Reports (King III Report, 2009; King IV Report, 2016)

Within the King IV Report, most of the governance components of the King III Report have been separated into individual governance components, such as the “Ethical leadership and corporate citizenship” (King III Report, 2009) which has been

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separated as “Leadership”, “Organisational ethics” and “Responsible corporate citizenship” (King IV Report, 2016). “Strategy and performance” as well as

“Remuneration governance” has been added in the King IV report. “Information technology governance”, as in the King III Report (2009), has been separated as two distinct components in the King IV Report, because technology is the source of business opportunity and disruption while information needs to be secured against any risk (King IV Report, 2016).

For this study, the King IV Report for corporate governance is of relevance, as it addresses governance outcomes and the accountability of the governing body to promote ethical culture and legitimacy. The King IV Report’s key aspects are outcome-based, “apply and explain” while 16 of the 17 principles are applicable to any organisation. The King IV Report also addresses the relevance of protecting the privacy of personal information as noted under the practices of 12^th principle of the report (King IV Report, 2016) which is in line with the POPIA requirements.